Q3 Market Report - Lake Front Area
Lake Front Area Market Trends: $0-$800,000 Price Range
The following stats are for the Lake Front Area. I have divided the Total Big Bear Area into 10 Sub Areas also to give you more detailed information on the area where your property is located. Like most of Big Bear, I have broken up the Lake Front Market into two segments Up to $800,000 property value and the Luxury Market over $800,000. This seems to be the most accurate price range to split the market. Every three months, I will post detailed quarterly market trend tables and graphs for each price range with a condensed but easy to understand examinations of the market stats. If you want to just get the short version you can skip to the bottom and read the Summary.
Market Prices
Table 1 (below) was created from the two year average price monthly graphs for the Total Big Bear Area and the 10 sub areas from October 2020 to September 2022. Graph 1 below covers the Lake Front Area. I will be using this table to analyze what is happening to the Real Estate prices in the 0 - $800,000 Market in the Lake Front Area. The table and graph have the parameters of: Price Range 0 - $800,000, from October 2020 to September of 2022.
While there will be fluctuations from quarter to quarter but for now The Lake Front Area has a $22,000 loss over the last 2 years. This is the only area that has lost all the price increase that it has built up over the last two years. I would expect this loss to increase over the next few quarters. The Lake Front Area lost $123,000 in average price in the third quarter, which was the highest loss for all areas and a total of $164,000 from the peak of March 2022 which was also the highest for all areas. Most of the gain was in our Boom cycle which for most areas stopped in April of 2022.. This loss will now continue to go down because we are in a down cycle. We will have to see how long this down cycle will last and the influence it has on prices.
If you want to know what your Big Bear cabin is worth in this price range, contact me to get a more detailed market analysis that takes into consideration the number of Bedrooms, Bathrooms, Square Feet, Lot size, Condition and Views or location.
Sales vs Active Listings (supply and demand)
Table 2 shows what residential real estate inventory changes (Sales vs Active listings) have occurred for the Total Big Bear Area. It is made up of monthly graphs for each area. Graph 2 below is for the Lake Front Area. These stats are compiled using a parameter of: Price Range of 0 - $800,000 from the 2-year period October 2020 to September of 2022.
You can see from the last 2 columns that sales have gone down by 6 this quarter compared to last quarter, and listings are up by 50. But when you look at this quarter compared to the third quarter of last year, sales are down 27 in this quarter and listings are up by 3. This shows us that economic influences of higher rates and inflation have affected sales this quarter compared to last quarter or compared to a year ago. And they have had a big effect on price. More listings will also cause prices to go down. With the Lake Front Area having such a large increase in listings I am sure that had a big factor in the prices going down so much. Given the current economic conditions I would expect the number of listings to go up and sales to decline. This will also put pressure on prices to continue to go down. Which is what you would expect in a declining market. So far the Lake Front Area is in a full declining market.
Graph 3 In the Lake Front area, the sales to expired ratios are still good with sales and expired listings close to a 1:1 ratio. There will always be expired listings. And a 1:1 ratio is considered a good ratio for a stable market. But in the last 2 quarters we are seeing a ration of 1:2 which is expected in a down market. With all the added listings in this area expect the expired listings numbers to increase.
Summary
With these numbers we can say that the third quarter continued with a declining market in the Lake Front Area with a very large drop in price. It had the largest drop in price for the Big Bear Area not only in the third quarter but also since prices peaked in March of 2022. A lot of this was because of weak sales and a large increase in listings. This quarter the Lake Front Area is our first sub area that actually had a loss of equity over the last two years. For vacation homes the Lake Front Area is in a big declining market. We now know that we are going to stay in this declining market for at least the next few quarters. .It will be interesting to see what happens in the Lake Front Area.
Expect changes in the graphs for the fourth quarter to better reflect the economy.
My opinion is that we are going to see prices starting to fall. Cabins will be on the market longer. Sales will decline. It will take longer to sell cabins and we will have more expired listings because of the sellers who don’t reduce their price.
Lake Front Area Market Trends: $800,000 and Up Price Range
The following stats are for the Lake Front Area. I have divided the Total Big Bear Area into 10 Sub Areas also to give you more detailed information on the area where your property is located. Like most of Big Bear, I have broken up the Lake Front Market into two segments Up to $800,000 property value and the Luxury Market over $800,000. This seems to be the most accurate price range to split the market. Every three months, I will post detailed quarterly market trend tables and graphs for each price range with a condensed but easy to understand examinations of the market stats. If you want to just get the short version you can skip to the bottom and read the Summary.
Market Prices
Table 1 (below) was created from the three year average price annual graphs for the Total Big Bear Area and the 10 sub areas from October 2020 to September 2022. Graph 1 below covers the Lake Front Area. I will be using this table to analyze what is happening to the Real Estate prices in the 0 - $800,000 Market in these areas. The table and graph have the parameters of: Price Range 0 - $800,000, from October 2020 to September of 2022. Because of the volatility of the monthly numbers, which can have a difference of $400,000 or more each month, I will be using the annual averages for the $800,000 and up Luxury market to analyze how prices are changing in this price range. I have also printed the monthly graph (Graph 2) for the Lake Front Area if you want to look at it.
In the Lake Front Area, so far in 2022 this area has continued with the price increase that it has been enjoying the last 3 years. What started out with an average price in 2020, of $1,524,000 brought us to $1,675,000 through the first three quarters of 2022. For an increase of $151,000. And because of the sale of lake front cabins the Lake Front Area has a $381,000 increase over the Total Big Bear Area. This increase in price has brought the Lake Front Area to a ranking of 1 out of 10 areas in average price for 2022 so far. So overall you can see that the prices in the Luxury Market for the Lake Front Area have had a nice increase the last few years. and is doing well compared to the Total Big Bear Area. To see how the prices in the other sub areas have done for comparison please refer to Table 1 below or check out the write up on that area.
If you want to know what your Big Bear cabin is worth in this price range contact me, you have to get a more detailed market analysis that takes into consideration the number of Bedrooms, Bathrooms, Square Feet, Lot size, Condition and Views or location.
Sales vs Active Listings (supply and demand)
Table 2 shows what residential real estate inventory changes (Sales vs Active listings) have occurred for the Total Big Bear Area. It is made up of monthly graphs for each area. Graph 3 below is for the Lake Front Area. These stats are compiled using a parameter of: Price Range of $800,000 and up from the 2-year period October 2020 to September of 2022.
You can see from the last 2 columns that sales are up this quarter compared to last quarter by 6 and listings are down by 3. When you look at this quarter compared to the third quarter of last year sales are up by 6 in this quarter and listings are down by 4. This shows us that economic influences of higher rates and inflation haven’t affected sales compared to last quarter and the Lake Front Area actually has more sales in this quarter compared to a year ago. So having less listings this quarter compared to last quarter didn’t cause sales to go down. Given the current economic conditions I would expect the number of listings to go up and sales to decline. Which is what you would expect in a declining market. It is also worth noting that during 2019 and before we were lucky to have 2 or 3 sales in three months in this price range for the whole Big Bear market. So overall this market is still in good condition.
Graph 4 In the Lake Front Area, the sales to expired ratios for the last two years have been good with sales and expired listings close to a 1:1 ratio and on occasion going to a 1:2 ratio. There will always be expired listings. And a 1:1 ratio is considered a good ratio for a stable market. If we begin to stay in the 1:2 ratio it will be an indicator that this market will be going into a declining market..
Summary
With these numbers we can say that the third quarter in the Lake Front Area prices have stayed strong which has preserved the equity build up in the cabins there for the last 3 years. Sale have increased over the last two quarters and listings have gone down. Which will help prices stay up. Expired listings have stayed about the same also which indicates that this market is still a strong market. The nice part is that sales and prices stayed at a good level. For vacation homes in a luxury market this is a good market for now. We will have to see how the influence of the economy affect this market.
We now know that we are headed into the possibility of a very different market. Economic data for the fourth quarter and beyond is all pointing to a slowdown in the market.
Expect changes in the graphs for the fourth quarter to better reflect the economy.
My opinion is that we are going to witness a more normal market. In order to get to that normal market prices may come down a little more. Cabins will be on the market a little longer. Sales will decline.